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Iceland considers IPO of state-owned Islandsbanki

COPENHAGEN, Dec 18 (Reuters) - An Icelandic state holding company has proposed that the government sells a stake in state-owned Islandsbanki in an initial public offering.

The state’s holding company on the financial market, Icelandic State Financial Investments (ISFI), made the proposal in a letter late on Thursday to Finance Minister Bjarni Benediktsson.

Islandsbanki, one of Iceland’s three largest banks with a domestic market share of around one-third, has 744 employees and last year posted profit after tax as 8.45 billion Icelandic crowns ($66.64 million).

It was one of the three banks that collapsed within a few days of each other in 2008, prompting the state to take over the remains and either restructure existing banks or create new ones. As of 2016, Islandsbanki is wholly owned by the state.

ISFI made a similar proposal in March this year, but the sale was delayed due to the COVID-19 pandemic.

ISFI said it would determine the size of the public offering in May next year.

Islandsbanki has a BBB/A-2 credit rating at S&P Global Ratings.

The sale will be handled by international and domestic legal and sale advisers and will conclude in May next year, ISFI said. ($1 = 126.80 Icelandic crowns) (Reporting by Jacob Gronholt-Pedersen and Nikolaj Skydsgaard; Editing by Karishma Singh)

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